Eland Oil & Gas PLC Updated Presentation (2483O)
03 November 2016 - 8:45PM
UK Regulatory
TIDMELA
RNS Number : 2483O
Eland Oil & Gas PLC
03 November 2016
3 November 2016
Eland Oil & Gas PLC
("Eland" or the "Company")
Updated Presentation Including Management Estimates on Reserves
of Resources
Eland Oil & Gas PLC (AIM: ELA), an oil & gas production
and development company operating in West Africa with an initial
focus on Nigeria, is presenting at the Africa Oil Conference a
presentation on 'Field Rehabilitation and Production Growth in a
Low Oil Price Environment'. The presentation is now available to
view on the Company's website: http://www.elandoilandgas.com/.
The updated presentation includes management estimates of an
increase in reserves associated with Opuama-1 and Opuama-3 of
approximately 178%. Management estimate that total recoverable
reserves from these two wells have increased threefold from about
10 million barrels to approximately 29 million barrels in the first
14 years of production. The reserves recoverable on the Opuama
field, as previously announced, currently remain unchanged,
however, these workovers have allowed the OML 40 JV to access a
significant quantity of these reserves for a very minimal cost.
Furthermore, post intervention, the gross aggregate flow rate
from Opuama-1 and Opuama-3 in Year 1 is expected to be at least
9,200bopd, up from 2,900bopd. As a result of the increased flow
rate the Company expect payback for the capex spend on Opuama-1 in
22 days and payback from Opuama-3 in 13 days. Management estimates
the incremental NPV15 of Opuama-1 and Opuama-3 re-entries using a
flat $40/bbl price deck to be $8.1million and $46.8million
respectively and $10.4million and $59.9million respectively using a
flat $50/bbl price deck
The presentation also contains Eland management's current
estimates of OML 40 reserves and resources, including Eland's
current Gbetiokun's STOIIP and P50 Reserves estimates of circa.
160MMstb and 55.8mmbbls respectively.
During the prolonged shut-in of Forcados we have continued to
evaluate our portfolio. After the success of Opuama-3, and the high
test flow rates obtained from the D1000 and D2000 reservoirs, we
believe significant upside exists from a further workover of
Opuama-7 alongside the previously announced re-entry and completion
of Gbetiokun-1. The Company will announce more on the Opuama-7
workover and the updated work programme following recommencement
and stabilisation of production from Opuama, OML 40. Recommencement
of production from Opuama is expected in the near future and we
will update the market in due course
-ENDS-
In accordance with the guidelines of the AIM Market of the
London Stock Exchange, John Downey, a geologist and Eland's Chief
Technical Officer, who has a BSc from Nottingham University, an MSc
from Leeds University and has over 30 years of relevant experience
in the upstream oil and gas industry and who is a member of the
Society of Petroleum Engineers and meets the criteria of qualified
person under the AIM guidance note for mining and oil and gas
companies, has reviewed and approved the technical information
contained in this announcement.
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
www.elandoilandgas.com
George Maxwell, CEO
Olivier Serra, CFO
Finlay Thomson, IR
Canaccord Genuity Limited (+44 (0)20 7 523 8000)
Henry Fitzgerald O'Connor
Nilesh Patel
Panmure Gordon (UK) Limited (+44 (0)20 7 886 2500)
Adam James / Atholl Tweedie
Tom Salvesen
Camarco (+44 (0) 203 757 4980)
Billy Clegg / Georgia Mann
Notes to editors:
Eland Oil & Gas is an AIM-listed independent oil and gas
company focused on production and development in West Africa,
particularly the highly prolific Niger Delta region of Nigeria.
Through its joint venture company Elcrest, Eland's core asset is
OML 40 which is located in the Northwest Niger Delta approximately
75km northwest of Warri and has an area of 498km(2). In addition,
the Company has a 40% interest in the Ubima Field, onshore Niger
Delta, in the northern part of Rivers State.
The Company's medium term strategy is to grow its production
base through low cost well re-entries, workovers and infill
drilling. Since November 2015, the Company has delivered a
three-fold increase -in production from the Opuama field in OML 40
through the recompletion of wells Opuama-1 and -3. The field most
recently produced at about 4,400 bopd prior to the shut-in of
Forcados but is expected to resume at a rate in excess of 10,000
bopd. The Company's export route is via the Forcados Oil Terminal
but Eland is currently working on adding two supplementary
evacuation routes to diversify its crude export routes.
The OML 40 licence holds gross 2P reserves of 83.2 mmbbls, gross
2C contingent resources of 41.2 mmbbls and a best estimate of 254.5
mmbbls of gross unrisked prospective resources. The Ubima field
holds gross 2P reserves of 2.4 mmbbl of oil and gross 2C resource
estimates of 31.1 mmbbl.
Forward-looking statements
This report has been prepared to provide additional information
to shareholders to assess the Group's strategies and the potential
for those strategies to succeed. The Statement should not be relied
on by any other party or for any other purpose.
The report contains certain forward-looking statements. These
statements are made by the directors in good faith based on the
information available to them up to the time of their approval of
this report but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
US$ United States Dollars
% Percent
bbl / bbls barrel / barrels
BOPD Barrels of Oil Per Day
CPR The reserves and resources evaluation
provided by Netherland, Sewell &
Associates Inc. as at 31 March 2016
Gbetiokun Gbetiokun Field, OML 40
MMB Million barrels
NPV15 Net Present Value at 15% Weighted
Average Cost of Capital
OML 40 Oil Mining Lease 40
Opuama Opuama Field, OML 40
P50 Reserves Reserves having a 50% certainty
of being produced. These reserves
are also referred to as "2P" (proven
plus probable).
STOIIP Stock Tank Oil Initially In Place
This information is provided by RNS
The company news service from the London Stock Exchange
END
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